Views of a Nepali Economist

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Use of internet bandwidth increasing

*Consumers of data and internet services have reached to 3,111,858 with overall 10.89 per cent internet penetration rate by mid-July
*Nepal Telecom has a total of 1,133,876 data and internet subscribers
*Ncell has 1,874,078
*UTL has 51,377 internet subscribers
*ISPs have 52,527
*There are 42 Internet Service Providers (ISPs) in Nepal currently

Banks' shareholders return decreases

In the last quarter of the fiscal year, the commercial banks’ return on equity recorded decline from that of third quarter when the average return on equity of the commercial banks stood at 15.56 per cent. Generally, the return on equity between 15 per cent and 20 per cent are considered desirable.

Among the 21 banks that have published Return on Equity in their financials, 12 commercial banks’ return on equity is above the average while nine commercial banks’ return on equity is less than the industrial average of 14.4 per cent.

Governor calls for investment in agriculture‚ service sectors

Banks' interest income rising

The higher lending interest rate due to tight liquidity situation pushed the interest income of the commercial banks by Rs 10 billion in the last fiscal year compared to a fiscal year ago. The total interest income of the commercial banks stood at Rs 37.8 billion by the end of fiscal year 2010-11, while the commercial banks had recorded Rs 27.8 billion a fiscal year ago, according to the unaudited financial report of fourth quarter released by the commercial banks.

In the last fiscal year (2010-11), the average net interest income of the commercial banks stood at Rs 1.21 billion while a fiscal year ago, the average net interest income of the whole banking sector was at Rs 896 million. Even discounting the four new commercial banks that were not in existence a fiscal year before, the average interest income of the old 27 commercial banks amount to Rs 1.38 billion in last fiscal year. In the preceding fiscal year these 27 banks had recorded Rs 1.03 billion as the average net interest income.

The old commercial banks’ interest income — that is income from interest on lending — rose to Rs 42 billion which was almost half at Rs 27 billion a fiscal year ago. The interest expense — that is interest paid for the depositors — also surged from Rs 57.5 billion to Rs 80.5 billion in fiscal year 2010-11.

The interest rate offered by the banks for deposit ranges from mere two per cent to 12 per cent, according to Nepal Rastra Bank (NRB) data

Garments demand in Europe up

...export of Nepali ready made garments has increased by 11.5 per cent compared to same period last year in the first eleven month of the last fiscal year...

PM to set up Economic Cell

Four Dharan drug makers close factories...unions to blame?

Nepal Telecom slashes data tariff by 33 percent

NT data uses will now have to pay just 10 paisa for 100 KB of data. Earlier, the state-owned telecom operator was charging 15 paisa per 100 KB. The tariff is applicable for subscribers using via from GPRS, PDSN, EVDO and 3G technologies.

NT has also slashed inter-zone voice tariff from VSAT, PSTN and fixed CDMA to GSM and CDMA to Rs 1 per minute. It was charging Rs 2 per minute for the service.

The state-owned telecom operator has also slashed subscription charge for CDMA Skyphone to Rs 600 with the talk value of Rs 500. Previously, it was charging Rs 1,135 as service charge for CDM Skyphone.

Two-wheelers registration slumps

...4,761 units of two-wheelers were registered in the first month of the current fiscal year in Bagmati zone...In the fiscal year 2010/11, about 53,960 units of bikes were registered in the Bagmati zone...Currently, Nepali customers pay 80 percent tax on two-wheelers and 238 percent tax on four-wheelers

Industries’ closure hits women the most

...around 20,000 workers lost their jobs in the past seven years in the Morang-Sunsari corridor. Of them, around 60 percent were women. The seven years saw more than two dozen industries of readymade garment products, ghee, jutes and zinc plate, shut down.

...the Surya Nepal’s garment division was employing 550 women...JD Apparels that was shut down one-and-a-half years ago had 1,300 women working...700 women lost their jobs when Easy Wear was closed

Airlines raise frequency for peak tourist season

Bhutan’s national carrier Druk Air, which currently operates daily flights between Kathmandu and Paro, has applied for six additional flights weekly under the temporary operating permit (TOP) from Sept 29

Air China and China Southern Airlines...have added three and four flights per week respectively, increasing their frequency to seven per week...Fly Dubai has been granted seven additional flights under the TOP for a total of 14 flights per week...Qatar Airways has upped its flight frequency to 28 flights per week from 21 which will be operational from Oct 1...Hong Kong-based Dragonair has increased its Kathmandu-Hong Kong flights to seven per week from thrice a week...Gulf Air is planning to add two flights per week due to strong demand from the European market

Bahrain Air and Arke Fly have announced resumption of their operations to Nepal. Bahrain Air resumed its flights from Sept 2 while Netherlands-based Arke Fly is scheduled to start service from Sept 23. Arke Fly will be operating a weekly flight while Bahrain Air operates a daily flight....Low-cost Indian carrier IndiGo will be the 28th international airline in Nepal’s skies when it starts its daily service from the second week of October

Labels: airlines, banks, garment, internet, labor unions, nepal telecom, nepal tourism year

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1. In The Land of the Buddha, a Buddhist nun awaits justice

2. Nepalese Rupee continues to weaken

Nepali rupee weakened by 42 paisa against a US dollar over the week, as the greenback bounced back in India with which currency the rupee is pegged. On Friday, a dollar was valued at Rs 73.91.

3. Chandan writes about Imprudent unions & weak industries

4. Prices of building materials fall as demand drops

According to dealers, brick, cement and steel prices have dropped significantly in a year due to low demand and rising competition.

...price of cement price has come down by Rs 100-150 per bag depending on the brand, of which there are more than 30 in the market.

...price of steel...has come down by over Rs 10 per kg in a year

Brick prices have also gone down 10-22 percent

5. Nepal’s Election Commission among world’s best five

...more than 9.5 million voters have registered their names along with their photographs...Out of them 52 per cent are women...and...some 157 belong to the third gender

6. The State of Nepalese Banks and Financial Institutions

7. On Nepalese housing market

8. Paddy fields have shrunk 59,000 hectares in the last two years

...land under paddy cultivation has shrunk to 1.49 million hectares from 1.55 million hectares within two years...due to...increasing urbanization and crop diversification

Nepal has lost 59,464 hectares of paddy fields since 2008-09. The Eastern Tarai, the country’s major paddy producing region, lost 77,556 hectares of paddy fields within two years.

The five districts of Eastern Tarai contained 375,208 hectares of paddy fields in 2008-09 which have now diminished to 297,652 hectares. Dhanusha, Mahottari, Sarlahi, Rautahat, Bara, Parsa and Chitwan districts of Central Tarai have 310,679 hectares of land under paddy plantation. Paddy fields in the Western Tarai districts—Nawalparasi, Rupendehi, and Kapilvastu—expanded to 190,190 hectares from 188,950 hectares in 2008-09. In the Mid-Western Tarai districts of Dang, Banke and Bardia, the area under paddy cultivation rose to 117,550 hectares in 2011 from 112,458 hectares in 2008-09. The Far Western Tarai districts of Kailali and Kanchanpur together have 106,655 hectares under paddy cultivation.

The Numbers:(in hectares)
Tarai Belt// 2008-09// 2011-12

EASTERN

Jhapa// 96,700// 82,400
Morang// 88,200// 78,200
Sunsari// 51,158// 53,791
Saptari// 68,400// 37,691
Siraha// 70,750// 45,570
TOTAL// 375208// 297652

CENTRAL

Dhanusha// 55,000// 61,972
Mahottari// 40,250// 34,716
Sarlahi// 38,750// 39,350
Rautahat// 46,800// 42,396
Bara// 55,335// 52,725
Parsa// 46,200// 46,690
Chitwan// 32,755// 32,770
TOTAL// 315090// 310619

WESTERN

Nawalparasi// 46,490// 46,690
Rupendehi// 72,500// 71,500
Kapilvastu// 69,960// 72,000
TOTAL// 188950// 190190

MIDWEST

Dang// 37,458// 38,500
Banke// 36,500// 36,500
Bardia// 38,500// 42,550
Total// 112458// 117550

FAR WEST

Kailali// 60,000// 60,000
Kanchanpur// 46,655// 46,655
TOTAL// 106655// 106655

Labels: banks, construction, election commission, garment, housing, IRs, labor unions, NRs, nun, paddy

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1. Surya Nepal gives reasons for closing the garment factory in Biratnagar

The reasons:

it lost the orders it had on hand.....its buyers from the US and Europe categorically said they will not place orders in future as well

...the company suffered a severe blow mainly after the buyers came to know about ´hostage situation´ in the factory, wherein trade union affiliated with the UCPN (Maoist) locked over two dozen managerial staff for 24 hours without food and water, and rescue carried out by the police

What rattled the company most, according to Jha, was that senior trade union leaders, local political leaders, entrepreneurs, administration and local labor office could do nothing when the factory management requested them to rescue its staffers after the ANTUF-R locked them in the factory.

2. Resource gap of Rs 451b threatens MDGs achievement

...Nepal is likely to miss the targets, particularly related to hunger, employment, gender balance, environment and reproductive health...because the country suffers from a resource gap to the tune of Rs 451.43 billion over the last 5 years of the MDGs period

Targets that Nepal is likely to miss: halving the population below minimum level of dietary energy consumption, proportion of underweight children (aged between 6-59 months) and proportion of stunted children (aged 6-69 months)

Nepal also faces difficulty in achieving targeted survival rate to Grade 5 in primary education, literacy rate for 15-24 years old, proportion of births attended by skilled attendants, universal access to reproductive health, and proportion of population using an improved sanitation facility.

3. Some numbers on Nepal's telecom industry

*telecom services in the country have reached to 46 out of every 100 people
*mobile users account for 40.59 percent, fixed line 2.93 percent and other services 2.52 percent

*from mid-July 2009 to mid-July 2010, telecom operators had added 2.62 million users
*from mid-July 2010 to mid-July 2011, telecom operators added 4.23 million users
*This is an increase of 61 percent

*In 2010-11, Nepal Telecom’s subscribers grew by 23.33 percent
*Ncell’s customers grew by a 90.95 percent
*Ncell is now the market leader in the GSM segment with 43 percent market share
*This is an increment of 10 percent over the year
*NTC's overall market share fell from 61 percent to 51 percent in the last fiscal year

4. Shikhar Shoe is one of the rare business success stories in Nepal

Shikhar Shoe is now all set to scale up its production capacity...With the new technology, Shikhar’s daily production capacity will increase to 5000 units from the existing 1,000

The company has invested over Rs 100 million for the expansion of its manufacturing facility. Currently, Shikhar offers over 400 models—from sports, party wear to casual shoes. It has been selling its products from more than 1,000 outlets in 70 districts.

With Dashain around the corner, Shikhar Shoe is readying itself to launch over 70 new models.

5. Another business success story in Nepal: Poultry Farming.

Growing per capita income and living standards has meant that demand for meat, especially chicken, is growing in Nepal. Suppliers have been struggling to keep up with the demand.

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And Finally, a satire on the banking industry:

Labels: garment, MDG, mobile phones, Ncell, NTC, poultry, Shikhar Shoe, surya nepal